As a Realtor I’m often presented with opportunities to invest in real estate myself. When a really nice family contacted me about selling their old home place, I knew I needed to consider purchasing the property myself. The house was in terrible condition, but the location was fantastic. A three bedroom, one and a half bath home sitting on a full acre, just outside the city limits of Oxford. The house was small, about 1300 sq. ft., but I didn’t see this as a negative. Smaller houses are easier to manage, and with this being my first flip, I didn’t want to be overwhelmed by large house.
If you’re considering a flip, there are several things to consider. Most importantly, it will most likely cost more and take longer than you anticipate, and problems you didn’t expect will likely pop up. I’m sure seasoned flippers can anticipate problems and better predict repair costs, but it takes time and experience to get to that point. If you’re going into your first flip, I highly recommend having a healthy contingency fund for unexpected problems.
When asked if I would do another flip, my response is typically, “it depends.” Looking back, I’m incredibly grateful that I had the opportunity to do the project. But, if I had it to do over, I would have done it differently. Below are some pros and cons that applied to me and my situation:
- As a result of this project, I now have personal experience with an investment property, and can better help my clients that are investing in a flip house.
- I learned a lot about construction. I am definitely not an expert in construction, but after completing this project, I have a much better understanding of construction including framework, plumbing, electrical, etc.
- Seeing the transformation was incredibly rewarding. I really enjoyed the process of taking an ugly duckling and transforming it into a lovely home.
- I made the former owners happy. Once the house was finished, I invited the previous owners back to take a tour before I put the house on the market. They were shocked! And incredibly moved and proud of what the home had become.
- I made a profit. I made a positive return on this investment, but there were some financial drawbacks that I will cover next.
- This project tied up funds for longer than anticipated. The entire process, start-to-finish took about 8 months. During this time, my available cash was tied up, limiting my ability to invest in other aspects or my business.
- It was very time consuming. Since I was acting as general contractor for the project, I had to make all decisions, coordinate sub-contractors, purchase materials, etc. On the bright side, I know every Lowe’s Home Improvement Store within a 30 mile radius like the back of my hand :).
- Time spent on this project potentially pulled me away from other jobs that might have been more lucrative. It’s hard to put a value on time, but looking back, the time spent on this project was huge.
For part 1 of this blog series I’m focusing on the exterior of the house. There was so much outside work to do on this house! While the lot was terribly overgrown, and had a dilapidated single-wide mobile home, it still had a lot of positives. For one, the lot was one acre exactly. It’s hard to find a house on a full-acre lot anywhere in Oxford, so this was a major selling feature. The lot was also mostly flat with lots of beautiful mature trees. And the house was 3-sides brick – hands down the best exterior facade you can have.
The goal for the exterior of the house was brighten in up. But first, we had to clear the overgrown shrubs. I really wanted to keep the existing roof, but it was installed poorly, and with the high quotes I was getting for repairs, it simply made sense to replace the roof. Plus, I could pick a new color that would better fit my vision for the exterior.
See the round poles holding up the front porch in the top picture? Those are asbestos plumbing pipes – nice. I replaced them with 6×6 posts stained dark walnut. Black shutters, a fun blue front door, and simple landscaping tied everything together.
I know that the decision to paint brick can be quite controversial, but in this situation it was a no brainer. I did not like the brick. At all. I chose a light gray that I thought would appeal to the most buyers.
There were also trees that needed to come down. Also, a controversial topic. There was a huge water oak on the front corner of the house. I debated on keeping it, but it was simply too close to the house, was dropping large limbs and the acorns landing on the roof sounded like gunfire. It had to go.
Thankfully the siding on the back of the house just needed a new coat of paint. But, the soffits and facia board required a good bit of work.
Removal of the single-wide mobile home presented several challenges. The tongue and wheels were still there, but if I attempted to have it pulled out, it would literally fall apart going down the road. One option was to bury the whole thing – I am not kidding. This was the cheapest option. In the end, I had it torn apart and hauled off – load-by-load.
Let’s talk about cleaning up the lot. It was expensive. Way more expensive than I anticipated. Plus, we discovered that the previous owner used the back half of the lot as a dumping ground for tires, car parts and all sorts of other debris. We removed four dump truck loads full of debris. Once the debris was gone, I had a crew clear the areas between the trees and clear the way for a nice size backyard.
The majority of the work on the home took place in the Spring of 2021 as the cost of building materials was sky rocketing. Luckily, I didn’t need a whole lot of lumber, but I did have to build a much smaller deck as a result of high lumber costs.
A piece of pipe over a shallow ditch and a load of gravel was enough to create a semi-circle driveway. Nothing fancy, but very functional.
Hindsight is 20-20. If given the chance would I do another flip? The answer is, “it depends.” I definitely would not take on another project that needed as much work as my first one did.
Next up, I’m taking you inside. It turned out so pretty and I can’t wait to show you the transformation. Stay tuned…